Tuesday, September 27, 2022

Revenue growth and $24m US deal for MGC Pharma

MGC Pharmaceuticals, the Australian-founded medical cannabis producer has reported a 42.5% increase in revenue YOY, and a US supply and distribution agreement with AMC Holdings Inc with minimum orders of US$24 million. The three-year agreement is binding and relates to MGC’s phytomedicine products including CannEpil, CogniCann and CimetrA.

Dual-listed on the Australian Securities Exchanges and the London Stock Exchange, MGC’s shares jumped from 2.10p on Wednesday 25 August to 3.8p on Thursday 26 August following the news of the deal, and have settled to 2.65p.

MGC’s preliminary financial report for the year to 30 June 2021 shows revenue of over AU$2.9 million, and net losses of over AU$13.9 million (a decrease YOY of 27.88%).

In the commentary on the results, MGC notes that phytocannabanoid sales showed an increase of 69% YOY, with 12,457 units sold worldwide, amounting to ~AU$2m in revenues.

In a separate report, MGC sets out the deal with AMC:

  • US$3 million order for CannEpil, CogniCann and CimetrATM for year one to be placed five days from grant of a national clinical trial number, with an additional US$21m of orders over years two and three. 
  • For the year one minimum order, AMC will pay MGC Pharma US$750,000 in advance prior to the receipt of the products, followed by an irrevocable US$2.25 million letter of credit. 
  • AMC has been founded by leading US Healthcare and ex-Federal Government legislative and regulatory executives, as a specialist vehicle for the import and distribution of specialist phytomedicines into key US markets 
  • AMC is seeking to expand the research and growth of phytomedicines in the USA, and view MGC Pharma as the leader in the sector 

The report explains that AMC will initiate clinical trials, and will seek regulatory approval for products through to the FDA.

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